China has the same inequality as America. Hmmppphhh. America is a mature developed country. Growing at a slowish 2%. China is a developing one growing at 8%.

Its much harder to keep inequality down when you are growing rapidly. Its just physics. If a slow moving traffic jam speeds up some at the front go faster than the others. It takes a while for the slow ones to catch up. Just as it takes a while for the people living in inland areas to catch up with their coastal cousins. But it will happen. And when China is a mature country, as long as it doesn't get an American system of government, its Gini coefficient will come way down.

Does the Gini data really matter in China? People here do not care about whether it is 0.41 or 0.61 or even 1. The data can be manipulated very easily, from Gini indicator to air quality indicator, even temperature degree. What I have felt since I retured China is the price inflation. The product price increased with incredible rate, people are not happy in this country. Everyone what to earn more money and then immigrate. That's it.

Capitalism as practiced in the US is too extreme. Canada is a good comparison as it is a large country of 35 million people with the same average income and taxation per person as the US. However it has one of the lowest Gini factors in the world amongst wealthy countries.
The simple fact is that if you let capitalism run rampant, there will be a few super driven / intelligent / lucky individuals that will accumulate more than others and slowly take over all of the wealth. I have been a businessman all my life and I can tell you that the 1st million $ is the hardest but once you have that capital you can take advantage of opportunities that others cannot. Getting that 1st million $ is more a question of luck than anything else. Yes, hard work is important but being at the right time, the right place, the right education, the right connections, the right intelligence is more important. Having had that luck should not give a person the right to dominate others unreasonably and concentrate wealth and power in the hands of a few. This is where the tempering hand of progressive taxation comes in where the wealthy give back to society through social programs, free health care and so on. Most importantly however, the wealthy should NOT be above the law.

Study some math before talking about GINI and the inequality in China.
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Imagine the population in hong kong or taiwan had been tripled, you think the government there could've created 200% more job opportunities with good wages?

BTW, western often talk about the poor management of SOE, in China
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How should SOE be managed? Lay off one third of employees and more inequalities? Like western companies did after 2008 financial crisis, to make the investors, the top 1%, happy?

As chinese ,I am very worrying about my country.I think we can learn a lot from the development of japan in 1970s, the redistribution of income is a vital factor to the continued development ,otherwise , Chinese government will get cornered and trap itself.

i see that someone has compared Chinese economic development to a high speed train and pointed out that china s blind pursuit of economic growth is dangerous and stupid. Agree, but the gov. seems to think differently. They ve been working hard to make big the "pie" of social wealth, believing that s the sole solution to income inequality and forgeting that without an equal income distribution system, the extra pie only goes to the mouth of the rich, resulting a wider income gap. second, difference in income is originally a normal phenomenon as people possess different levels of ability and intelligence. the thing that makes Chinese people unhappy and resentful is not this people earn more than me, but he do so by illegal or dirty means such as corruption. in a word, the social injustice is the key that leads to income inequality. proof: the wealthy is equally resentful as the poor. and their common target is usually those beer-belly officials. so today many Chinese r spiritlifted to see president Xi Jinping call for an anti-corruption campaign. third, economic strength is an primary part of national strength. u think we can hold on to those disputed islands for so long without the second largest GDP in the world ?

nobody writes 'perfect english' at TE.
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the TE comment code stipulates that your comment be posted in english. it does not say be posted in 'perfect english'.
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TE is the place to view and/ or express opinions. it's not the proper place to learn english (although it helps). so do not let your ability writing in english (from worst to excellent whatever) be the intimidation to express yourself, as long as your writing is in some kind of english, not chinese, not russian, not german and certainly not japanese.

i see that someone has compared Chinese economic development to a high speed train and pointed out that china s blind pursuit of economic growth is dangerous and stupid. Agree, but the gov. seems to think differently. They ve been working hard to make big the "pie" of social wealth, believing that s the sole solution to income inequality and forgeting that without an equal income distribution system, the extra pie only goes to the mouth of the rich, resulting a wider income gap. second, difference in income is originally a normal phenomenon as people possess different levels of ability and intelligence. the thing that makes Chinese people unhappy and resentful is not this people earn more than me, but he do so by illegal or dirty means such as corruption. in a word, the social injustice is the key that leads to income inequality. proof: the wealthy is equally resentful as the poor. and their common target is usually those beer-belly officials. so today many Chinese r spiritlifted to see president Xi Jinping call for an anti-corruption campaign. third, economic strength is an primary part of national strength. u think we can hold on to those disputed islands for so long without the second largest GDP in the world ?

i see that someone has compared Chinese economic development to a high speed train and pointed out that china s blind pursuit of economic growth is dangerous and stupid. Agree, but the gov. seems to think differently. They ve been working hard to make big the "pie" of social wealth, believing that s the sole solution to income inequality and forgeting that without an equal income distribution system, the extra pie only goes to the mouth of the rich, resulting a wider income gap. second, difference in income is originally a normal phenomenon as people possess different levels of ability and intelligence. the thing that makes Chinese people unhappy and resentful is not this people earn more than me, but he do so by illegal or dirty means such as corruption. in a word, the social injustice is the key that leads to income inequality. proof: the wealthy is equally resentful as the poor. and their common target is usually those beer-belly officials. so today many Chinese r spiritlifted to see president Xi Jinping call for an anti-corruption campaign. third, economic strength is an primary part of national strength. u think we can hold on to those disputed islands for so long without the second largest GDP in the world ?

@ Pacific Centuryin reply to SandamanJan 23rd, 08:10
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'Te Japanese are able to live good lives today ......... '
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it's all very well articulated in your entire comment, except the above para.
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the japns have NOT been living good lives, unless you call a live, of 'wang guo lu/ 亡国奴' == meaning by definition people whose nation was surrendered and are now a vassal state without independence or freedom. its people are second class people as seen by its occupier.
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that's because japan is still under heavy foreign troops occupation, even 73 years after its efeat and surrender == , is worth living for. not a good live.
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for japns war crimes, many japns war criminals were hanged by the us and excuted by the chinese after trial. japns people were nuked twice. Not a good live.
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and japns owe everything japan has got since ww2 to the benevolence and kindness of the us, from economic opportunities of korea war to vietam war, to all sorts of technology transfer from the us, and whatever japan can steal or copy == from transistor radio, TV, VCR, to rockets and satellites, everything. but the price japanese were and are paying is unlimited occupation by and abject subservience to the master the us and it has to do whatever the master dictates, including plaza accord that sent japan back 20 years. not a good live.
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the japanese finance problem is terminal. japns sovereign debt is over 230% of its GDP and japanese debt is world's largest in absolute value. the worst part is that such heavy debts are borne, not by international investors, but by the poor japanese people themselves. and it works out that each working japanese will bear a debt of $145,000, or 300% more than G7 average by 2016. japan and japns people are technically broke, and running out of money too(so they are QE or pinting money like mad now). Japan is doomed. not a good live.
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I love japns people, and I hate to see japan is dying a painful slow death like this.

while chinese have had inferiority complex with respect to just about any nation on earth for being a weakling and being plundered, looted, raped and murdered by foreign powers of the last 200 years, it's not so much of their own doing per se, and therefore they can bounce back with confidence and strength like they have done now.
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the sad thing is that japanese developed inferiority complex with respect to chinese, americans,... because of japanese own doing through comitting war crimes and losing the war with hands (ah) up. the inner guilt and outward unrepentenance are so ingrained so that japanese are incapable of coming out of such inferiority complex. and it even shows so through japanese posts here.
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that japan is still occupied by its war victor and is still a vassal state did not help either. now that japan is financially broke with little or no money (they are printing money now), I don't see how japanese could ever get out of this inferiority complex. they could get more money from china for the moment, but this time japan has to ask nicely and say pleeeease.

except in Okinawa, i never saw an american soldier in japan.
By far you can see more american soldiers if you travelling germany or italy for instance -or even korea
and after living in 6 different countries in 5 continents.. i think life in japan is pretty good

iam a citizen of no china nor japan and i am some jobless sob poor enough to join this forum and rich enough to not care what it says here. i bash those who bash under dogs, and i hate those who hide crimes against humanity. but i don't do no lie.
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many nations may fall under the pressure of superpower the us, including s. korea, but only japan is the shameless vassal state.
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under the facade of all that tough talk and bragging, your japan is as timid as a kitty at the disposal of its master the us. I have seen them how they behave themselves willing slave like so abjectly in tokyo and in washington with americans, any american. they, them japns, have really been bombed out of their juices silly, still being psyched out as shown in their mass inferiority cmplex syndrome.
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can you honestly believe a nation is free and indepedent with all that many foreign military bases, war ships and troops stationed on your land? come on, use your head just for this once.

and I have seen prostitutes who lived better than many folks. so you can say life in japan is pretty good indeed.
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don't know how many continents, but i have lived in more than 20 countries (if staying over 30 days is 'lived') and visited a still good many. i will give you that material life in japan is or was pretty good, but only until before 311, and now all japns fish and food are potentially dangerously contaminated for human consumption. no one call that 'pretty good living' no? so smart ones rushed to imported food. and they fight foreign beef or rice no more. and to the majority japns people, poor thing, their government is still hiding the truth of radiation.
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in a nutshell, yes, you can prostitute your national dignity for a lot of doles === thus the 'pretty good life' that only the shameless and coward would enjoy.

hi and no sweat. you said the good thing and the right thing and I enjoyed reading it. thanks.
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like a good american (albeit I am no 'good american'), america's 'japan bashing' must be continued for the good of the world.
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these ungrateful bunch, after all that americans have given to them? they appeared to be humble and submissive, but seeing is not believing, who knows what's cooking inside them against americans, the minute you leave them behind your back unchecked?
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afterall, china must reduce its delta blues and deal its problems cited in TE squarely, to avoid falling through the cracks, like others such as japan has had done.

A lot of people in china work very hard. But housing is still a problem for us. And these houses are not even private properties. So this big kleptocratic government makes us work for them. I think that's the source of income inequality.

One of the driving factors behind inequality in any country is a failing education system, which is certainly the case in China. People in underprivileged areas simply do not have access to good schools, and this, combined with the country's huge population, means that amongst the undereducated, there is still a lot of competition for jobs that the educated wouldn't even want to do.

I propose the following solution: Legalize gambling in the poorest areas, and have the casinos be SREs. Encourage the rich to come, bringing in tourist revenue as well as gambling revenue, and have all profit from said enterprises fund educational institutions in these backward areas.

This would work, because the vast majority of the Chinese nouveau riche are clever enough to have made a lot of money but too heartless and stupid to invest in education themselves. Give them casinos, and the morons will flock to the roulette tables to bet 8,888 Rmb on the number 8 at 8:00 am or pm. I assure you, the Chinese new money twits who will do this are legion.

It is well established that when all other factors are the same, countries with a large population will always have greater inequality than countries with smaller populations. *One* of the reasons why the USA has far greater economic inequality than France or the UK is because it has five times as many people. China has more than four times as many people as the USA. How much inequality should they have?

Actually it not about the size of the country in terms of population, so much as diversity and geographical size. However, inequality within provinces are high. In Shanghai its about 0.44, Guangdong about 0.41.

Apart from the Gini index, don't forget China's effort having lifted so many millions of poor guys out of the poverty. Improvement of education and urbanization should have contributed a lot to the setting up of good foundation for better life in China. With the ever growing pie of nation revenue, I believe China through urbanization and education can make China a better place to live. I am particularly interested to note the change of its landscape compared to that of Europe. Spend the money and make the place as beautiful as Switzerland. Gini index is a separate issue to be used as a reference only. It is just part of China's national concern for all the upgrading work.

Forget about all those "good old days of perfect equality" in the early 30 years as they were not that good. Now, only those poor old guys in the country side want that equality back whereby everyone will get the same dull dress and look, primitive life style and ration food to stay alive. China is a communist country in name only. People practice absolute capitalist lifestyle. Forget about the oligarchic governance. Other than politics, people are allowed to do anything they like. Chinese now have so many billionaires and big companies. Their purchasing power is stunningly strong that has shocked the world. The top item of today is the milk powder. The Hong Kongers nickname the mainlanders the locusts as they are seen everywhere on earth to snap up anything they like to buy. This buying spree has disturbed the normal buying pattern in those countries they visit. It is a strange experience when you have too many customers at a time. How strange is for you to hate the influx of the foreign customers in flocks. The rise of China is real. You cant ignore the effect as you can feel the impact now, in your place. You cant run and hide. The "locusts" are everywhere to be seen. Don't worry, they are not ready to take away your wife yet. The tide has reversed. Its time for the west to complain the inequality and probably ask their governments to control the number of the visitors and limit the money they spend. But can they do that? God knows.

to PacificCentury Virulent xenophibia is not worthy of this forum.
Chinese society before Japanese invasion had been extremely unequal.
Outflow of wealth from a country has little to do with domestic
distribution and is completely irrelevant to the theme. Let us
observe decency of debate.

Inequality in China: this kind of superstition is more of the Matthew effect, or of the Marx effect, that of a Gaussian hoax. This is one of the few countries in the world where a growing middle class fills the gaps. In Europe, it has been sacrificed on the fiscal altar for the sole benefit of the State.

I don't trust any figures released by Chinese Government. It seems that we Chinese citizens are all fools. The gap is in sight and could be seen everywhere around China. Some officials drive rich cars and live in villas while some citizens sleep on the floor of railway station. That is the gap, it's unnecessary and meaningless to measure it but to work on it. Since many interest groups had been formed in China, the so-called "income distribution system reform" could never come out. In China, life is tough and peole are on their own.

Right for regarding state reforms, but you could see more beggars in the streets of Geneva that in the streets of Shanghai. This only applies to the "visual effect", the origin the people involved is not the same.

Why are public officials allowed to keep their personal assets a secret? The central gov should say today that every official from Mr. Xi to the lowest village cadre has to disclose all of their assets, and these disclosures will be audited by an independent body. Chinese taxpayers deserve to know exactly how their money is being spent.

Do this, and income inequality will iron itself out in a couple of years. It'll probably pop the housing bubble as well, with all the illicitly purchased properties entering the market.

'Wage growth is a lot slower than GDP growth though...'/
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so sorry to disappoint you. what you said above is either mistaken info or else a malicious lie.
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to bad for you, the rates of income growth for both urban and rural people in 2012 in china exceeded that of growth of GDP of 7.8%, by quite a few percentage points actually. what can you and i do about it, eat your heart out ?
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and what about your (or our) india, or japan?

You sound like a very angry person. I'm sorry to hear that.
From 2003-2008, GDP growth surpassed wage growth, and again in 2010-2011. Currently the growth rates are roughly equal.
Anyway, you can review the data here: http://anabundantworld.com/2012/08/10/no-one-has-made-money-in-china/
I'm neither Indian nor Japanese. Sorry if that interferes with your racist view of the world where everyone acts their color.

The model of China’s economic development could be compared to its unique high speed train running on track, and it’s certain the train is due as planned but some passengers on board are not so privileged as to be assured of adequate protection resulting from broken windows of their compartments and shortage of wrappings to fend off cold following on accelerating, which is one of by-products of social injustice caused by blind pursuit of growth to the neglect of levelheaded distribution of wealth created by all citizens involved.

Blind pursuit if economic growth leads not only to unbalanced results but also disastrous damages to environment, and smog or haze over major northern cities these days in China is manifestation of such an ecologic disturbing. Development today can not and should not be achieved at the cost of our surroundings of tomorrow, or the blue sky of our younger generations.

Blind pursuit of growth produces GDP complex, and GDP has become the only criterion to assess and promote local government officials, which makes development model more lopsided especially in areas where natural resources are abundant like Inner Mongolia.

Blind pursuit of economic growth also breeds puzzle headed among people, which challenges Chinese traditional values of morality and responsibility and results in more serious consequences on mentality of younger generation.

It’s high time for CCP leaders to sit down to concentrate on structural adjustment about which they have complained for years. Market economy with Chinese characteristics should be carried out with all factors of the society being taken into consideration rather than just materialistic ends.

Why not to lower the pace of the ‘High Speed Train’ a little to make some meditation on what has come into views outside of the compartment the same time to provide better protection for all passengers on board of the train with a common goal?

Before the opening up of China, there was no obvious wealth gap. Thereafter, some people have been earnestly taking part in the money game to pursue wealth as allowed by the country and the wealth gap growth has been right behind inevitably. Like someone said earlier in this forum, capitalism is not a tool for equality. Only the government can regulate a little by way of improving the well being of the nationals, employment, taxing more on the rich and so on. IMO, China's situation is not bad. China's fiscal pie for national spending for the year 2013 will see a 12% growth, reaching up to RMB 12t. That is a dreaming figure for many countries on this planet. With this in view, Wen should have done a good job. I wish he would have happy retirement commencing in March this year.

If China can do something to ensure the basic needs of its people, those people still find life meaningful and hopeful. China has done much in this regard such as the provision of the minimum wage, medical and health care, better education, and so on. Under the present Gini index, it might be wrong to punish the rich and to magnify the hardship of the poor. The index is however useful for the government to utilize its funding more rationally. Besides, it can convince the rich to be more watchful about their social responsibility to contribute a little to the pie. In Hong Kong, we feel the effect of the growing China especially on its continuous rise in wages and appreciation of currency. Inevitably, when China grows, it exports inflation. The Hong Kongers have a mixed feeling on this.

I think that's an overly simplistic view. Hong Kong's inflation is much more related to the currency peg and the US's endless QE programs. The other aspect is the influx of mainland money, which is not managed well at all. Property prices are rising because of controls on real estate purchases in the mainland (which export demand to HK) and because of insane tax policy that makes everything in HK cheaper than in the mainland (hence the absence of milk powder from every grocery store between Sheung Shui and Tai Po)

"Growing inequality" has been at the forefront of China's collective mind since Deng warned everybody, repeatedly, in plain language, that they would suffer this scourge of inequality as a consequence of his opening up policies.
As a result, those Chinese who remember Deng's warning – and most do – may feel somewhat impatient with the government's slow (but already measurabe) progress in righting this imbalance.
To imply otherwise is to simply mislead and mischaracterize the current situation. Which, when you think about it, appears to be the raison d'etre of Western media coverage of China.